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Sunday, October 20, 2013

Online money laundering: Tricks of the trade

Via the MIT Technology Review, I was interested to run across this United Nations analysis (pdf) of online money laundering. Some of these methods I'd heard of - including the use of export goods and employment forums to launder drug money - but the manipulation of multiplayer online gaming communities Grits had admittedly never considered. Here's a notable excerpt from the MIT Tech Review:

A common approach until recently was to use the Costa Rican digital
currency service called Liberty Reserve. This converted dollars or Euros
into a digital currency called Liberty Reserve dollars or Liberty
Reserve Euros, which could then be
sent and received anonymously — one of the few services to allow this. The
receiver can then convert the Liberty Reserve currency back into cash
for a small fee.

In May this year, however, the US
authorities shut down the service and charged its founder and various
others with money laundering.

But Richet says the closure of
Liberty Reserve is unlikely to end these practices because there so many
alternatives. These include WebMoney, Bitcoins, Paymer, PerfectMoney
and so on.

Another increasingly common way of laundering money is
to use online gaming. In a growing number of online games, it is
possible to convert money from the real world into virtual goods
services or cash that can later be converted back into the real thing.
“Popular games for this type of scam include Second Life and World of
Warcraft,” says Richet.

Then there are the money mule scams. Most
people will be familiar with the spam in which a high level official
from a developing country asks your help to transfer significant amounts
of money and are prepared to pay well for your services. But first,
they require your banking details which they promptly use to empty your
account and then disappear.

In a growing number of cases, however,
the criminals do actually transfer large amounts of money into your
account and then ask you to forward it. However, since this involves
stolen funds that are being laundered, you are accountable for the
crime.

Another scam is to offer people jobs in which they can make
a substantial income working from home. However, the ‘job’ involves
accepting money transfers into their accounts and then passing these
funds on to an account set up by the employer. In other words, money
laundering!

For those with any professional interest in the subject, the full 19-page report (pdf) is worth a read.

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